RECOMMENDATION: Receive and approve minutes of the ATN Board of Directors meetings held on Wednesday, June 22, 2016 and Thursday, August 18, 2016.

DATE: AUGUST 24, 2016 TO: ATN BOARD OF DIRECTORS FROM: CRISTINA MONTOYA, PROJECT MANAGER RE: AGENDA ITEM #2

Anaheim Transportation Network

Board of Directors Meeting Minutes

Wednesday, June 22, 2016

3:00 P.M. – 5:00 P.M.

Anaheim Regional Transportation Intermodal Center

2nd Floor Conference Room

2626 East Katella Avenue, Anaheim, CA 92806

ATN Board Members in Attendance: Bharat Patel, Castle Inn & Suites Dan Lee, City of Anaheim Fred Brown, Desert Palm Springs Mark Ochoa, Anaheim Marriott Jerry Alder, Anaheim GardenWalk Merit Tully, Honda Center Paul Sanford, Anabella Hotel Ron Kim, Prospera Hotels Bill O’Connell, O’Connell Hotels Jeffrey Runsten, Hilton Anaheim

ATN Staff Present: Diana Kotler, ATN DeAndre McCall, ATN Lita Aguilar, ATN Lynn Keller, ATN

ATN Legal Counsel: Eric Williams, Cummins & White, LLP Todd Priest, Curt, Pringle & Associates Members of the Public Present: Rick Baligalcupo, OCTA

Sue Zuhke, OCTA Felicia Adams, First Transit Jan Strickland, First Transit Valente Chacon, First Transit Mark Gaughan, Genesee Group/First Transit Linda Johnson, City of Anaheim Steve Wilks, IBI Group Michele Abedian, Farber Hass Hurley

SPECIAL CALENDAR: 1. Presentation of Resolutions to:

Miguel Salazar Operator of the Month of April Valente Chacon Operator of the Month of May

Director Kotler announced to the Board of Directors the Operators for the month of April and May. Miguel Salazar could not be present during the meeting, but Valente Chacon was. Valente has been with the company since May of 2013 and has demonstrated exceptional customer service to passengers and co-workers since then. He has no customer complaints, no accidents, receives exceptional reviews from peers and supervision, and has an outstanding attendance record. In Valente’s spare time he likes to simply relax with family, also enjoys being a great grandfather. His family is first to him and his time on earth will be dedicated to them all.

CONSENT CALENDAR: 2. Receive and approve minutes of the ATN Board of Directors held on Wednesday, April 27,

2016

3. Receive and file status report pertaining to the Anaheim Transportation Network operations -- ATN Focus Area Reports –April and May 2016

4. Receive and file ART Operating Reports:

a. Maintenance: Mileage & Road Call Reports: April and May 2016

b. Safety & Training: Safety & Security Report: April and May 2016

c. Monthly Contract Payments Adjustments: March and April 2016

d. Key Indicator Reports: April and May 2016

5. Receive and file ATN membership report for April and May 2016 6. Receive and file financial reports for the periods of March and April 2016, and approve

electronic payments for the period of April and May 2016

7. Receive and file customer service summary for April and May 2016

8. Receive and file sales report summary for April and May 2016

CALL TO ORDER – 3:02 PM Anaheim Transportation Network Board of Directors Meeting

WELCOME & INTRODUCTIONS

ADDITIONS/DELETIONS TO THE AGENDA

PUBLIC COMMENTS -- NONE

9. Approve and adopt certain revisions and updates to the Anaheim Transportation Network’s Drug and Alcohol Program per 49 Code of Federal Regulations(CFR) Part 40 and 49 CFR Part 655

10. Approve and adopt certain revisions and updates to the Anaheim Transportation Network’s

Fleet Maintenance Plan including Maintenance Policies and Procedures

By motion, Sanford/Patel, Consent Calendar items 2-10 were passed by a single motion. Yeas: Lee, Brown, Ochoa, Alder, Tully, Kim, O’Connell, Runsten Noes: None Abstain: None 11. ART Operational Update – Monthly report provided by First Transit, Inc.

Jan Strickland, General Manager

Monthly operational report to the ATN Board of Directors was provided by ATN contractor, First Transit. Jan Strickland, General Manager at the Anaheim location made a presentation informing ATN Board of Directors that recruiting efforts are still on going. Union negotiations have been pushed back and when resume, will include economical portion of discussion. First Transit management have been focusing on the safety campaigns which culminated in the summer bar—b-que. Driver recruitment efforts will continue to ensure adequate staffing levels. ACTION CALENDAR: 12. Subsequent to staff presentation, discuss, review and adopt Anaheim Transportation

Network’s Operating Budget for Fiscal Year 2016/2017

ATN Executive Director, Diana Kotler, presented the proposed Fiscal Year (FY) 2016/17 Operating Budget, which presents a balanced plan of available resources and uses of funds necessary for the provision of transportation services for The Anaheim Resort® District and surrounding communities. The proposed budget utilizing available financial resources required for the provision of Anaheim Resort Transportation (ART) services. ART services are provided to the community by staff from four (4) distinct divisions. The proposed budget does not propose any additions to the current personnel plan. One position will be reclassified to a full-time status. ART services will be managed by the existing thirty five (35) full-time positions, seventeen (17) part-time positions and sixteen (16) key contractor positions. The attached organizational chart provides an overview of the of the ATN organizational structure for FY 2016/17. The proposed Fiscal Year (FY) 2016/17 Operating Budget presents as a balanced plan of available resources and uses

of funds necessary for the provision of transportation services for The Anaheim Resort® District and surrounding communities. The proposed budget utilizing available financial resources required for the provision of Anaheim Resort Transportation (ART) services. ART services are provided to the community by staff from four (4) distinct divisions. The proposed budget does not propose any additions to the current personnel plan. One position will be reclassified to a full-time status. ART services will be managed by the existing thirty five (35) full-time positions, seventeen (17) part-time positions and sixteen (16) key contractor positions. The attached organizational chart provides an overview of the of the ATN organizational structure for FY 2016/17. Each division submitted a budget request to the Finance Manager, which was subject to an internal review to ensure conformance with the ATN Work Program, as established and approved by the Board of Directors. The proposed budget warrants a fiscally responsible and sustainable provision of transportation services. ATN is in a stronger financial position, at the end of the FY 2015/16, then is has been in the years past. However, even though, we had strong operational performance, the agency still needs to seek grant funding to support capital rolling stock replacement of its aging fleet. Grant funding efforts will be pursuit to continue to seek grant funds toward this effort. As the ATN looks forward to FY 2016/17, staff is recommending:

No increases in the Anaheim Resort Transportation Fare Structure; x No increase to the assessment structure for local business establishments; and One-time credit to hospitality establishments, in good financial standing, of $50,000.

.

ATN ORGANIZATIONAL CHART

Kotler reviewed the proposed revenue sources to account for growth of the hospitality establishments, continuation of services for areas outside of The Anaheim Resort and Platinum Triangle, federal reimbursement funds, Project V Transportation funding from the Orange County Transportation Authority (OCTA), alternative fuel tax revenue and advertising sales. Total annual revenue for FY 2016/17 is projected at $16,278,311, a 3.1% increase from the FY 2015/16 level of $ $15,787,140. Actual revenues for FY 2015/16 project an increase in revenue of 4.0%.

The uses of funds include provision of transportation services, consulting agreements, personnel expenditures, maintenance, fuel and operating expenses. Total expenditures are budgeted at $ $15,310,078 for FY 2016/17. The proposed expenditure plan represents a 2.1% increase from FY 2015/16 expenditure levels of $14,987,598. The proposed expenditure plan also includes the following initiatives:

1. Marketing, re-branding and public outreach efforts to promote services through ARTIC, mobile ticketing applications and sales missions

2. Continuation of initiatives to determine future ATN operating structure 3. Support for special events and conventions at Disneyland® Resort and Anaheim Convention

Center 4. Continued deployment of zero emission bus technologies 5. Relocation of electric bus charging infrastructure 6. Operation of new, grant funded, services between ARTIC and Downtown Anaheim; and Costa

Mesa 7. Development of Mobility on Demand initiatives to meet future transportation needs 8. Operation of ARTIC Sports Complex Line for six (6) months, through December 2016 9. Additional advertising revenue from the City of Anaheim Economic Development Department

toward operation of Downtown Packing District Line

FY15 Budget FY16 Forecast FY17 Proposed

Sources of Revenue

4000 · ART Revenue

4010 · Participation Assessment Fees 2,047,000$ 1,808,757$ 1,976,400$

4011 · Assessment - Route 20 Hours 4,875,000$ 5,280,601$ 5,429,300$

4012 · Assessment - Route 20 Fuel 548,000$ 642,481$ 640,200$

4020 · Retail Assessment Fees 152,000$ 290,911$ 302,200$

4040 · ART Pass Sales 4,766,000$ 4,761,936$ 4,788,111$

4050 · ART Group Sales 450,000$ 632,453$ 517,300$

4060 · TVM Leases 120,000$ 119,000$ 120,000$

4070 · Advertising 748,000$ 768,755$ 814,800$

4111 · Cooperative Agreements (Metrolink & LOSSAN) 33,711$ 47,319$ 70,800$

4201 · Contract Penalties (Contract Reimbursements) 120,000$ 285,900$ -$

4310 · Grant Income

4311 · Anaheim Canyon Service (Proj S) 32,571$ 36,299$ 33,600$

4313-A - Downtown ARTIC Service (Proj V) -$ -$ 80,000$

4314-B-Costa Mesa Service (Proj V) -$ -$ 200,000$

4316 · Angel/Duck Express (MSRC Grant) 151,858$ 86,340$ -$

4321 · Grant Apportionment_Bus & Bus Facilities 75,000$ 87,278$ 90,000$

4322 · Grant Apportionment_PM 775,000$ 611,808$ 775,000$

4323 · Caltrans Planning Grant 163,000$ 142,000$ -$

4324 · ATID ARTIC Service 409,000$ 409,000$ -$

Total 4300 · Grant Income 1,606,429$ 1,372,725$ 1,178,600$

4400 · Membership Revenues 40,000$ 31,273$ 30,000$

4771 · Liquefied Petroleum Gas(LPG) 55,000$ 64,439$ 65,300$

4772 · Compressed natural Gas (CNG) 83,000$ 92,753$ 83,100$

4773 · Liquefied natural gas (LNG) 131,000$ 185,742$ 186,000$

4774 · Electricity -$ -$ 30,000$

Total 4770 · Alternative Fuel Tax Credits 268,000$ 342,934$ 364,400$

4700 · Other Income -$

4701 · OCTA & Metrolink Tickets 13,000$ 29,985$ 30,000$

4710 · Interest Income -$ 728$ -$

4712 · Late Fees and Interest -$ 4,455$ -$

4720 · Miscellaneous Income -$ 19,461$ 15,600$

4700 · Other Income - Other -$ 600$ 600$

Total 4700 · Other Income 13,000$ 55,229$ 46,200$

Total Sources of Revenue 15,787,140$ 16,409,001$ 16,278,311$

Fiscal Year 2016/2107 Sources of Revenue

FY15 Budget FY16 Forecast FY17 Proposed

Proposed Uses of Funds

6000 · Personnel Expenses

6010 · Salaries and Wages 2,018,004$ 2,117,500$ 2,294,200$

6022 · Employer Contribution -$ 12,280$ 15,000$

6030 · Medical Insurance 220,800$ 232,023$ 257,500$

6040 · Payroll Taxes 282,000$ 237,363$ 251,174$

7000 · Transp Svc - First Transit 7,134,000$ 6,497,062$ 7,122,100$

7020 · Participation Usage Credit 215,000$ 220,778$ 222,000$

7030 · ART Ticket Production Expense 45,000$ 58,032$ 45,000$

7031 · ART Refunds (2000) 3,000$ 939$ 1,200$

7033 · ART Kiosk Change 3,000$ 899$ 1,200$

7040 · Rideshare 6,000$ 36,087$ 40,200$

7110 · Tax Expense (Property & UBID) 93,000$ 58,459$ 69,190$

7180 · Fees and Permits 3,000$ 1,549$ 3,000$

7210 · Postage and Delivery 8,000$ 6,719$ 8,400$

7240 · Fuel Supplies 1,783,000$ 1,579,653$ 1,684,500$

7250 · Supplies & Uniforms 128,000$ 149,528$ 137,900$

7300 · Website Develop/Maint Exp 28,000$ 34,490$ 27,000$

7310 · Marketing 174,000$ 264,557$ 298,400$

7400 · Board and Committee Expenses 600$ 467$ 600$

7500 · Dues & Subscriptions 26,000$ 26,041$ 28,801$

7610 · Legal and Government Affairs 248,000$ 189,316$ 192,000$

7620 · Accounting, Audit & Tax 50,000$ 35,000$ 40,000$

7630 · Technology 106,800$ 52,300$ 111,600$

7640 · Grant Writing 15,000$ 34,848$ 30,000$

7650 · ADP Service 5,000$ 7,576$ 7,400$

7670 · Marketing and Advertising Svcs 137,000$ 137,559$ 141,400$

7680 · Copy Machine Maintenance 12,000$ 15,831$ 15,600$

7690 · Other Consulting 350,000$ 141,500$ 25,000$

7632 · Fleet Management (Zonar) -$ 24,821$ 48,000$

7700 · Auto Expense-Gas/Mileage/Parking 14,000$ 14,000$ 14,000$

7710 · Travel & Entertainment 36,000$ 82,873$ 72,000$

7800 · Repairs and Maint-Facilities 80,000$ 56,430$ 72,000$

7810 · Mobile Ticketing Service Fees 42,000$ 35,266$ 42,800$

7820 · Preventative Maintenance 865,800$ 1,078,924$ 818,334$

7880 · Facility Rental 54,000$ 56,081$ 85,800$

7890 · Vehicle Leases 513,000$ 54,872$ 14,400$

7900 · Equip/Furniture/Software Exp 57,080$ 75,272$ 85,200$

8002 · Prof Development & Training 9,000$ 5,037$ 20,400$

8003 · Conferences and Assn Events 15,000$ 14,539$ 18,000$

81300 · Utilities - Building 181,920$ 121,437$ 151,393$

8200 · Telecommunications 152,400$ 113,182$ 155,600$

8300 · Storage Expense 2,000$ 2,200$ 2,640$

8310 · Grant Expense -$ -$ 77,400$

8400 · Miscellaneous Expense 21,720$ 32,004$ 22,800$

8500 · Finance charges 194,200$ 190,272$ 216,600$

8600 · Insurance 156,000$ 172,243$ 180,000$

LNG Fleet Buy Out -$ 664,500$ -$

Total Expense 14,955,525$ 14,987,598$ 15,310,078$

Excess Revenue 831,615$ 1,421,403$ 968,233$

Fiscal Year 2016/2107 Proposed Uses of Funds

Agenda Item #12

ATN FY 2016/17 Operating Budget

Page 5 of 6

_________________________________________________________________________

Proposed FY 2016/17 Operating Budget

FY 16

Budget FY 16

Projected Actual FY 17

Proposed Budget

Total Sources of Revenue $15,787,140 $16,409,001 $16,278,311

Total Uses of Funds $14,955,525 $14,987,598 $15,310,078

Excess Revenue $831,615 $1,421,403 $968,233

Debt Service:

Bank of America _ Property Loan Bank of America _ ZEB Bus Fleet TOTAL DEBT SERVICE

$144,000 $168,000 $312,000

$144,000 $336,000 $480,000

Reserve Fund

$240,000

$240,000

Remaining Excess Revenue

$869,403

$248,233

Proposed Use of Funds Capital Improvement/Investment: Contingency Heavy Repairs LNG Bus Fleet Maintenance/Facilities Equipment Parking Lot Resurfacing TOTAL CAPITAL IMPROVEMENTS

$208,000 $30,600

$400,000 $638,000

Membership Credit

$50,000

Net Excess Revenue

$181,403

Electric Bus Infrastructure Capital Improvement Project Revenue Source: City of Anaheim Public Utilities

$500,000

ATN Reserve Fund:

FY 14 Balance $440,000 FY 15 Appropriation $240,000 FY 16 Appropriation $240,000

TOTAL RESERVES $920,000

The development of the budget was based on a series of programmatic assumptions including additional growth of the hospitality community, changes in contract reimbursement and billing rates, expansion of the ATN services to outlining communities, advertising and ticket sales, grant opportunities and other reimbursables. The ATN, through the provision of ART transportation services, directly, supports over 200 jobs. In addition, through the provision of contracts for professional services, the ATN supports additional 50 jobs.

Director Kotler reported that the ATN is in a stronger financial position. However, even though, FY 2015/16 led to a strong operational performance, the agency needs to continue to seek grant-funding opportunities to support its capital rolling stock replacement of its aging fleet. Director O’Connell stated that it is quite an accomplishment to see ATN transform from a small organization with uncertain financial future into a solid transit asset for The Anaheim Resort Community. Director Brown inquired when the $50,000 hotel credits would be issues. Director Kotler responded that credits would be issued on the September billing statements. Full budget presentation is attached as part of the minutes for June 22nd, 2016 ATN Board of Directors meeting.

By motion, Sanford/O’Connell approved staff recommendation to approve ATN Fiscal Year (FY) 2016/17 Operating Budget for the provision of transportation services for The Anaheim Resort® District and surrounding communities. Yeas: Lee, Brown, Ochoa, Alder, Tully, Kim, Patel, Runsten Noes: None Abstain: None

13. Award a three-year agreement for financial auditing services with Farber Hass Hurley LLP.

Authorize Executive Director, with assistance from ATN legal counsel, to execute an agreement commencing July 1, 2016

Executive Director Kotler, reported that at its March 23, 2016 Board of Directors meeting, the ATN Board authorized release of a Request for Proposals, RFP #2016-003 – Independent Auditing Services, to select a vendor to provide financial and auditing services for the ATN. RFP #2016-003 provided guidelines for the submission of proposals from the qualified independent auditing firms. Upon completion of the proposal review process, the best-

qualified vendor would be awarded a three-year service agreement. To select the independent auditing services provider, the ATN distributed RFP #2016-003 to qualified forty-eight (48) qualified financial auditing firms. In response to RFP #2016-003, the ATN received two (2) proposals from Farber Hass Hurley LLP and Lopez and Company LLP.

Based on the evaluation criteria, received proposals were evaluated and scored based on the demonstrated staff experience and qualifications, cost proposal, and firm qualifications. Based on the results highlighted in Table 1 – Summary of Proposal Evaluation, staff recommendation is to award an agreement to Farber Hass Hurley LLP as the best-qualified independent auditing services firm. Proposed costs are presented in Table 2. These costs are for services that included financial statement auditing and state and federal tax preparation and filing for both the ATN and ATN Asset Holding Company LLC.

TABLE 1 – SUMMARY OF PROPOSAL EVALUATION

Evaluation Category

Total Points Farber Hass Hurley LLP

Lopez and Company LLP

Relevant Experience and Staff

Qualifications

30 29 29

Cost 40 39.5 31

Qualifications of Firm

30 27 29

Total 100 95.5 89

TABLE 2 – FINANCIAL AUDITING SERVICES COSTS FISCAL YEAR 2017, 2018, AND 2019

Financial

Statements State and

Federal Taxes

Farber Hass Hurley LLP $22,000 $2,200

Lopez and Company LLP $33,892 $2,200

Farber Hass Hurley LLP has five offices across California and Arizona. It has been in business since 1990 with numerous clients nationwide. It is registered with the Public Company Accounting Oversight Board (PCAOB) and a member of the American Institute of Certified Public Accountants’ Center for Audit Quality and the Employee Benefit Plan Audit Quality Center. Some of the firm’s clients include Goodwill Industries of Ventura and Santa Barbara, The Thacher School, Center for Nonprofit Management, and Big Brothers Big Sisters Ventura County. A representative from Farber Hass Hurley LLP, Michel Abedian, was present at the meeting. Chair Sanford, ask Mr. Abedian if the firm is familiar with the requested work and is prepared to perform as outlined in the RFP and on the schedule important to the ATN. Mr. Abedian reassured the Board that Farber Hass Hurley LLP has been performing auditing services for over 20 years and the firm stands by its proposal and established performance schedule. Mr. Abedian also informed the ATN Board of Directors that the firm is excited by the award and will assign qualified resources to complete all required tasks. By motion, Sanford/Brown approved staff recommendation to award a three-year professional services agreement for financial & auditing services to Farber Hass Hurley LLP. Yeas: Lee, O’Connell, Ochoa, Alder, Tully, Kim, Patel, Runsten Noes: None Abstain: None

14. Authorize Executive Director, with assistance from legal counsel and Curt Pringle & Associates

to initiate review of ATN By-Laws. Appoint an Ad Hoc Committee to review proposed By-Law amendments and develop a recommendation for consideration of the ATN Board of Directors

Director Kotler reported to the Board, that due to the ongoing ART 2035 study effort, and potential decisions related to the institutional structure of the, review of the ATN by-laws was not conducted, as originally intended. ATN, as a private not-for-profit 501(c)4, transportation management association, last amended its –laws in 2011. By-law amendments typically occur at the ATN’s annual meeting of the membership in November of each year. In order to present proposed amendments at the November annual membership meeting, the review of the ATN By-Laws need to occur on following schedule:

June 2016 ATN Board of Directors appoints Ad Hoc By-Law Review Committee

July – August 2016 AD Hoc By-Law Review Committee Meetings September 2016 Preliminary review and consideration of the proposed By-Law

amendments by the ATN Board of Directors

October 2016 ATN Board of Director’s approval of the ATN By-Law amendment and authorization for a vote at the annual membership meeting

November 2016 By-Law amendments vote at the ATN annual membership meeting

In addition to the ATN staff and Ad Hoc Committee members, legal and government affairs staff will provide assistance and guidance toward development and presentation of the to be proposed amendments to the ATN governing document(s). Director Brown inquired if the Executive Committee is an Ad Hoc Committee. Director Kotler replied that all ATN committees are Ad Hoc. By motion, Sanford/Brown approved staff recommendation to begin review of the ATN by-laws with assistance from ATN legal and government affairs staff. Yeas: Lee, O’Connell, Ochoa, Alder, Tully, Kim, Patel, Runsten Noes: None Abstain: None

STATUS REPORTS: 15. ACTIVITIES UNDERTAKEN IN APRIL THROUGH JUNE 2016

a. Political events/rallies in The Anaheim Resort® and City of Buena Park

Diana Kotler informed the Board of Directors that ATN provided service, as part of it Mutual Aid Agreement with the City of Anaheim, to the Anaheim Police Department (APD), to assist with political events at the Anaheim Convention Center. The ATN was glad to accommodate demands/needs of the APD.

b. Federal triennial review summary – June 7, 2016

Diana Kotler reported that the Federal triennial review process was completed on June 7, 2016. No material issues were found and reviewers report will be presented at the next ATN Board of Directors meeting. Sue Zuhlke, representing OCTA, made remarks by thanking ATN staff and Board for a smooth and cooperative process. Todd Priest with Curt Pringle & Associates thanked OCTA for their ongoing guidance and assistance, as well as technical support for the ATN.

c. Award of grant applications from OCTA’s Project V Program

Diana Kotler reported that both Project V grants were awarded by OCTA Board. Further information will be presented at the future ATN Board of Directors meeting. d. Mobility of Demand Grant Application to Federal Transit Administration

Staff, in cooperation with several industry leaders, such as TransDev, Lyft, Passport, and others, submitted a grant application to FTA to fund Mobility of Demand initiatives.

BOARD WORKSHOPS 16. ART 2035 Capacity Building Study Update – Summary of Steering Committee

Recommendations and Next Steps – Presentation Attached. Discussion further occurred to update the ATN Board on the future initiative for ARC project, which will be delegated to OCTA as part of their Harbor Corridor Study. City of Anaheim will provide all project-related documentation to OCTA and all future planning efforts will be relegated to OCTA. Adjourn ATN Board of Directors Meeting 5:07 PM. Next regular ATN Board of Directors and general membership meeting will take place at the Anaheim Regional Transportation Intermodal Center (ARTIC) 2nd Floor Conference Room 2626 East Katella Avenue, Anaheim, on Wednesday, July 27, 2016.